VZCZCXRO5959
PP RUEHTRO
DE RUEHTU #1136/01 2331630
ZNR UUUUU ZZH
P 211630Z AUG 07
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 3707
INFO RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0921
RUEHAS/AMEMBASSY ALGIERS PRIORITY 7516
RUEHLO/AMEMBASSY LONDON PRIORITY 1342
RUEHNK/AMEMBASSY NOUAKCHOTT PRIORITY 0903
RUEHFR/AMEMBASSY PARIS PRIORITY 1816
RUEHRB/AMEMBASSY RABAT PRIORITY 8425
RUEHTRO/AMEMBASSY TRIPOLI PRIORITY 0130
RUEHCL/AMCONSUL CASABLANCA PRIORITY 4130
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 TUNIS 001136 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB (DIBBLE), NEA/MAG (HARRIS), 
EEB/TRA/AN (FINSTON), H 
STATE PASS USTR (BUNTIN) AND USAID (MCCLOUD) 
USDOC FOR ITA/MAC/ONE (HOLLY VINEYARD AND NATHAN MASON) AND 
ADVOCACY CTR (JAMES) 
CASABLANCA FOR FCS (ORTIZ) 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: EAIR ECON EINV ETRD TS
SUBJECT: CODEL COSTELLO PROMOTES OPEN SKIES AGREEMENT AND 
REVIEWS PORT SECURITY 
 
REF: A. TUNIS 1106 
 
     ¶B. TUNIS 192 
 
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Summary 
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¶1. (SBU) During a August 18-20 visit to Tunisia, the 11 
members of CODEL Costello were warmly welcomed by GOT 
officials, who were eager to highlight Tunisia's economic 
success and express their enthusiasm for the recently founded 
Tunisia caucus.  Prime Minister Mohamed Ghannouchi focused on 
the economy and opportunities for increasing US investment, 
with members of the delegation encouraging GOT consideration 
of franchising and of a US-Tunisian Open Skies Agreement. 
During the delegation's meeting with the Minister of Foreign 
Affairs, Abdelwahab Abdallah talked at length of the strength 
of US-Tunisian friendship and emphasized Tunisia's commitment 
to defending liberty.  In response to the Ambassador's and 
the delegation's questions about the potential for an Open 
Skies Agreement, Minister of Transport Abderrahim Zouari 
stated that President Ben Ali has instructed the Ministry to 
finalize a direct aviation line to the United States and that 
the Embassy will receive a response to the draft text "within 
the next few days."  He indicated that the GOT agrees on the 
"broad lines."  The delegation capped off their stay in 
Tunisia with a visit to the Port of Rades to view security 
procedures.  End Summary. 
 
¶2. (U) CODEL Costello participants as follows: 
 
REP. JERRY COSTELLO (D-IL) 
REP. JOHN DUNCAN (R-TN) 
REP. SOLOMON ORTIZ (D-TX) 
REP. BUD CRAMER (D-AL) 
REP. LUIS GUTIERREZ (D-IL) 
REP. TIM HOLDEN (D-PA) 
REP. NYDIA VELAZQUEZ (D-NY) 
REP. LEONARD BOSWELL (D-IA) 
REP. RUBEN HINOJOSA (D-TX) 
REP. MICHAEL CAPUANO (D-MA) 
REP. HENRY BROWN (R-SC) 
 
------------------------------------- 
Prime Minister Stresses US Investment 
------------------------------------- 
 
¶3. (SBU) In his meeting with the CODEL, Prime Minister 
Mohamed Ghannouchi focused on Tunisia's economic success and 
future challenges, rattling off a string of economic 
statistics.  Ghannouchi stated that the United States is a 
"privileged partner" in Tunisia and that he hopes to attract 
increased US investment.  He highlighted Tunisia's stable 
growth (4.5 percent over the past five years), large middle 
class (80 percent), and low poverty rate (3.9 percent), but 
acknowledged that in order to reduce unemployment and raise 
living standards Tunisia would have to enhance reform 
efforts.  Chairman Costello noted the delegation's interest 
in strengthening US-Tunisian relations and finding ways to 
bring more US investment to Tunisia.  Ghannouchi emphasized 
the currently low level of US investment, pointing out that 
just 60 out of 2800 foreign companies are American and only 
USD 200 million out of USD 20 billion in foreign investment 
is American.  (Note:  These figures differ from Embassy 
figures, due to differences in methodologies.  Embassy 
estimates total US investment at around USD 700 million, with 
some 67 US companies present in Tunisia.  End Note.)  He 
identified car and plane part manufacturing, the El Houaria 
electricity project, Enfidha deep water port tender, and 
Djerba desalinization plant as potential opportunities for US 
investment. 
 
¶4. (SBU) Costello raised the possibility of an Open Skies 
 
TUNIS 00001136  002 OF 003 
 
 
agreement and encouraged the GOT to enter into discussions. 
Ghannouchi noted Tunisia's goal to become a hub for services 
and that this would require transport upgrades, including in 
the aviation sector.  He stated that the GOT is targeting 8 
percent growth in services.  Rep. Nydia Velazquez, who chairs 
the House Small Business Committee, stressed the potential of 
franchising to tackle job creation and strengthen the 
economy.  Ghannouchi responded that the GOT will consider 
franchising, but remarked that there are already a few areas 
where franchising exists.  He stated that authorization for 
franchises depends on needs and the investment. 
 
¶5. (SBU) In response to Rep. Cramer and Rep. Boswell's 
comments on the importance of cooperation on security issues, 
Ghannouchi agreed that international cooperation is crucial 
to fight terrorism but stressed that it is also important to 
resolve the sources of terrorism, such as poverty and poor 
education.  Ghannouchi also welcomed Rep. Cramer's work to 
advance US-Tunisian relations through the creation of a 
Tunisia caucus. 
 
-------------------------------------- 
MFA Praises Long History of Friendship 
-------------------------------------- 
 
¶6. (SBU) Before embarking on a nearly 45 minute soliloquy on 
the history of US-Tunisian friendship, the importance of 
liberty, and Tunisia's developmental success, Minister of 
Foreign Affairs Abdelwahab Abdallah thanked Rep. Cramer and 
praised the inauguration of the Tunisia Caucus.  Abdallah 
stated that Tunisia has chosen "to defend liberty externally 
and internally", calling Tunisia's choice of democracy an 
"irreversible process."  He also highlighted Tunisia's 
vigilance with regard to security issues and emphasized 
Tunisia's "full" cooperation with the United States in 
confronting terrorism.  When Chairman Costello asked about 
Tunisia's political reforms, Abdallah stated that since 1987 
President Ben Ali has helped guarantee pluralism and noted 
that there are now six different political parties 
represented in the parliament.  Abdallah emphasized that 
political parties need to develop, but highlighted GOT 
support of political parties' newspapers as a means to help 
political parties express their opinion. 
 
----------------------------------------- 
Minister of Transport Supports Open Skies 
----------------------------------------- 
 
¶7. (SBU) Minister of Transport Abderrahim Zouari started the 
meeting by recalling his 1997 visit to the State Department 
as Minister of Foreign Affairs in celebration of the 1797 
agreement on commercial exchanges and navigation.  Zouari 
stated that US-Tunisian cooperation was richer than ever, but 
that there remained much to do in regard to aviation 
cooperation.  Zouari stated that President Ben Ali has given 
instructions to the Ministry to ensure there are direct 
flights to the United States and Canada.  He noted that he 
had received the preliminary Open Skies text and there is 
agreement on the "broad lines."  Zouari told the group that 
the Ministry will provide a response to the text "within the 
next few days."  Zouari additionally stressed the readiness 
of Tunisair to enter into codeshare agreements with US 
airlines.  Ambassador Godec raised the visit of the 
interagency economic delegation as another opportunity to 
advance these issues, also noting his desire for future 
meetings with the Minister. 
 
¶8. (SBU) In a brief side meeting with Ambassador Godec, 
Chairman Costello, and Rep. Jimmy Duncan, as well as during 
the larger meeting, Chairman Costello encouraged Zouari to 
follow-up with Ambassador Godec on the potential Open Skies 
Agreement and Northwest Airlines' codeshare request. 
Costello emphasized the positive impact a direct line would 
 
TUNIS 00001136  003 OF 003 
 
 
have on tourism and investment.  After Zouari stated that 
Tunisair will launch a tender for the purchase of 20 new 
planes at the end of the year, Costello urged Zouari to 
consider Boeing planes as Tunisair renews its fleet over the 
next several years.  Zouari indicated, as he has previously 
(Ref B), that Boeing's chances of winning the tender would 
improve if they manufactured components and spare parts in 
Tunisia.  When Costello asked if Zouari had met Secretary of 
Transportation Mary Peters,  Zouari extended an invitation to 
Secretary Peters to visit Tunisia, and stated that he 
 
SIPDIS 
welcomed the opportunity to meet with her. 
 
------------- 
Port Security 
------------- 
 
¶9. (U) During a visit to the Port of Rades, Tunisia's main 
container port, the group met with the Director General of 
the Merchant Marine and Ports Office (OMMP) Samir Hakimi and 
the OMMP's Director of Port Security and Safety Sahbene Ben 
Fadhel.  Hakimi and Ben Fadhel noted that the Port is in full 
compliance with the International Ship and Port Facility 
Security Code and has been recognized for security best 
practices.  The delegation was given a demonstration of the 
Port's container scanning procedures.  The OMMP stated that 
100 percent of all imported and exported containers are 
scanned. 
 
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Comment 
------- 
 
¶10. (SBU) The GOT welcomed CODEL Costello's visit as an 
opportunity to demonstrate Tunisia's success and the strength 
of US-Tunisian relations.  Though GOT officials did not stray 
far from their previous statements, the delegation's visit 
helped to raise economic issues such as franchising and the 
Open Skies Agreement and therefore lay the groundwork for the 
planned September visit of an interagency economic 
delegation. 
 
¶11. (U) CODEL Costello did not have a chance to clear this 
message before departing Tunisia. 
GODEC